Use case · Marketing ROI

Explain marketing ROI change by campaign and channel

Spend grew and revenue grew — but blended ROI fell. WaterfallBridge attributes the change to each channel so you know where the money worked and where it didn't.

The question

"We spent more on marketing and revenue went up, but our overall ROI (return per dollar) dropped. Which channels dragged it down — and was it efficiency, or just where we put the budget?"

Why traditional methods struggle

ROI is a ratio of two moving numbers — return and spend — so it doesn't decompose by subtraction.
Budget reallocation hides inside the blended number. Shifting spend to a weaker channel lowers ROI even if no single channel got worse.
New channels were launched mid-period, breaking like-for-like comparisons.
Spreadsheets blur efficiency vs mix — the two effects get lumped together.

How WaterfallBridge breaks it down

Set the Result to ROI, with SumY = Return / Revenue (numerator) and SumN = Spend (denominator), broken down by the Key = Channel (or Campaign). With last period as baseline and this period as comparison, WaterfallBridge separates each channel's efficiency change from the spend-mix shift and the new channel added.

Example input data

Illustrative figures. Display is a new channel this period.

Channel	Period	Spend (SumN)	Return (SumY)	ROI
Search	Baseline	50	200	4.0×
Search	Comparison	60	180	3.0×
Social	Baseline	30	90	3.0×
Social	Comparison	60	150	2.5×
Display new	Comparison	40	40	1.0×
Total	Baseline	80	290	3.63×
Total	Comparison	160	370	2.31×

Spend doubled and return rose +80, yet ROI fell −1.32× (3.63× → 2.31×).

Example output: the ROI bridge

Contribution of each channel to the −1.32× ROI change (illustrative).

Driver	Contribution to ROI	Effect
Baseline ROI	3.63×	start
Search — efficiency fell (4.0× → 3.0×)	−0.60×	down
Social — efficiency fell (3.0× → 2.5×)	−0.18×	down
Display — added (low 1.0× ROI)	−0.52×	down
Spend-mix shift toward weaker channels	−0.02×	down
Comparison ROI	2.31×	end

The conclusion

Two things happened at once. Search efficiency dropped from 4.0× to 3.0× (the biggest single hit, ~0.60×) as spend was pushed past its sweet spot, and the new Display channel diluted ROI by ~0.52× at a barely break-even 1.0×. Social grew but at lower efficiency too. The takeaway: scale back Search to its efficient frontier, put Display on probation, and don't credit the revenue gain without noting it cost almost half the blended ROI.

A higher revenue number can still mean worse marketing. The ROI bridge tells you which channels earned it.

FAQ

How do I explain a marketing ROI change by campaign and channel?

Define ROI as return divided by spend, set return as SumY and spend as SumN, and break it down by channel or campaign. WaterfallBridge attributes the blended ROI change to each channel, separating real efficiency changes from spend-mix shifts and from new channels added during the period.

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